Rails Secures $14 Million Funding Launching Hybrid Exchange on Ink Layer2

Coin WorldWednesday, Jun 4, 2025 8:42 pm ET
1min read

Rails, a pioneering crypto exchange, has successfully secured $14 million in funding, with Kraken leading the investment round. This significant capital injection marks the exchange's debut on the innovative Ink Layer2 blockchain, positioning

at the forefront of the evolving hybrid exchange landscape.

The platform introduces a unique hybrid model that combines the high-speed execution capabilities of centralized exchanges with the robust security features of on-chain custody. This approach is designed to enhance trader confidence by leveraging cryptographic proofs such as zero-knowledge proofs, ensuring transaction integrity and asset security. Rails' initial offering focuses exclusively on perpetual futures trading collateralized by stablecoins, deliberately excluding spot trading to concentrate on derivatives with enhanced liquidity and risk management.

Rails' hybrid architecture is engineered to overcome traditional trade-offs between speed and security. Centralized exchanges typically offer rapid order execution but expose users to custody risks, while decentralized exchanges provide security at the cost of slower transaction times. Rails' solution integrates centralized matching engines with on-chain settlement, ensuring that assets remain under cryptographic custody throughout the trading lifecycle. This model not only enhances trust but also aligns with evolving regulatory expectations by providing transparent audit trails and verifiable asset custody.

Launching on Ink Layer2, Rails enters a blockchain environment with significant growth potential. The platform's presence is expected to catalyze liquidity and trading volume on the Ink chain, attracting both institutional and retail participants. Rails' integration within Kraken’s broader infrastructure could facilitate a network effect, enhancing Ink’s utility and adoption. However, the platform must navigate challenges such as user onboarding, liquidity provision, and regulatory compliance to realize its full potential.

While Rails' hybrid model offers compelling advantages, it faces inherent challenges common to emerging exchanges. User adoption hinges on delivering a seamless experience that matches or exceeds incumbent platforms. Additionally, liquidity aggregation remains critical to ensuring competitive pricing and order execution. Drawing lessons from predecessors like dYdX, Rails must also maintain robust security protocols and transparent governance to build sustained trust. The platform’s focus on perpetual futures and stablecoin collateralization may mitigate volatility risks, appealing to traders seeking stability in derivatives markets.

Rails' successful $14 million funding round and strategic launch on Ink Layer2 signal a noteworthy advancement in hybrid crypto exchange development. By marrying centralized execution speed with decentralized custody security, Rails addresses key market demands for efficiency and trustworthiness in derivatives trading. As the platform scales, its impact on liquidity, user adoption, and the broader Ink ecosystem will be critical to watch. Stakeholders should monitor Rails' progress as it navigates the competitive and regulatory landscape, potentially setting new standards for hybrid exchange operations.